Sunday, February 01, 2015

Repealing Obamacare: mind the cross-purposes talk

Pardon me while I brush away some dust. This is going to be better done here rather on than on G+ as I intend to toss a print-version at some of the politicians who can't be bothered to check their G+ notifications... or set up a G+ account. 

The short version of events is as follows: The Republican led congress has called for a vote to defund, dismantle, and generally repeal the quote/unquote Affordable Care Act.

Mr. Obama has in turn stated that he will veto any attempt to undo the ongoing disaster known as ObamaCare. Mr. Obama also has the support, or so he thinks, of his political constituents.

The Republican Party is confident that currently elected Democrats will have in mind the significant losses to seats in the House of Representatives, Senate, and Gubernatorial positions. Strategically there is no question that supporting the Affordable Care Act has permanently ended the political careers of many card-carrying Democrat National Party Members. There is a strong expectation that Democrats who have any expectation of ever holding any political power again will break ranks and vote to pass the legislation ending the Affordable Care Act. There is the stronger expectation that should Mr. Obama enact his threatened veto; those same Democrats will likely choose to make history and save their political futures by voting to over-ride Mr. Obama's Veto.

In attempting to stop what is perhaps now a reversal in progress on par with the Repeal of Prohibition, it is worth keeping in mind that Mr. Obama, his party constituents, and members of the paid broadcast and print media are engaged in deliberately talking at cross-purposes to the Republican Party and the United States of America as a whole. Those aligned with Mr. Obama accomplish this cross-purpose talk with a single question:

What do the (Republicans) intend to replace the Affordable Care Act with?

This is a Mugs Question that opens into a Mugs Game. Mr. Obama and those aligned with his political ideals will accept nothing outside of a "Nanny-State / Single-Payer" insurance system. As American's have learned from Mr. Gruber; Such a System Was Never Economically Viable To Begin With.

To be blunt the economic non-viability of the Affordable Care Act was fairly obvious even for those with zero experience in any college level; or for that matter grade-school level; economics course. What it comes down to is "How Does Insurance Work?"

Insurance companies such as StateFarm, Nationwide, Progressive, Allstate, and Geiko all have a fairly simply business model.  Those covered under an insurance policy deposit a comparatively small amount of their financial resources in a series of payments over time into the Insurance Company's Bank. The word "Bank" refers to the total collected amount of financial resources the Insurance Company has; not to a specific banking institution.

The Insurance Company adjusts the amount of financial resources expected to be deposited from any single covered entity against the Risk(s) that the covered entity will have to withdraw from the Insurance Company's Bank. The greater risks that any single entity represents requires a larger financial resource to be deposited. Case in point: an automobile driver with multiple legal violations will be considered a "High Risk" to the Insurance Company's "Bank." As such an automobile driver with multiple infractions on their license will be expected to deposit a significantly higher financial resource.

The Insurance Company Business Model relies on a greater number of covered entities contributing greater financial resources to the Bank than the number of covered entities withdrawing financial resources from the Bank. Which in-turn creates the infamous Insurance Adjuster archetype; an individual who is responsible for minimizing the amount of financial resources that have to be withdrawn from the Bank. Once again Auto-Insurance is a standout example where an insurance company might cover repairs at one auto-shop rather than another because the financial resource costs for labor and equipment costs are lower.

The Insurance Company Business Model ALSO relies on an almost entirely voluntary client base. Even the United State's mandatory Auto Insurance provisions require that a US Citizen actually own an automobile that is driven on an automotive infrastructure maintained using Taxpayer funds.  In other words: in the US a driver has to have automotive insurance if they take their vehicle on public roads. The need to rely on a voluntary client base directly leads to competition between insurance companies; which in turn helps lead to lowering the financial costs for any single covered entity who might get a better deal with a competitor.

Mr. Obama's Affordable Care Act outright ignored many of the fundamentals of the Insurance Company Business Model. At the very least the Affordable Care Act attempts to make coverage by an Insurance Company mandatory. Those who cannot afford a viable third party Insurance Company must be covered by a Taxpayer Sponsored Insurance Company; which automatically invalidates any up-ward spiral of expected behavior caused by competition. Rather than making health-insurance easier to access; this directly causes a drastic decrease in customer-service and let's third party entities attach booster rocket's to their financial resource premium. What's a potential client going to do? Pay-up for the increased costs on third party plan? Pay for their own coverage and the coverage for other s in taxes?  Not pay anything at all? Making insurance coverage mandatory was never a viable solution.

Mr. Obama's Affordable Care Act also places more power in the hands of the Insurance Adjuster Archetype. I myself have run into an issue with established entities like Blue Cross/Blue Shield in Georgia where a panel within the insurance company made a ruling on medical coverage, when no person on that panel was even remotely qualified to make any kind of ruling in regards to the medical issue at hand (neurosurgery). There is no getting around the fact that Medical Decisions absolutely have to be made by a Competent and Qualified Doctor; not by an insurance company employee using WebMD or Wikipedia. This is not a fact that is up for argument or debate.

Mr. Obama's Affordable Care Act further ignored the principles for an actual Insurance Company Business Model that a covered entity's financial deposits are adjusted not only against the risks that financial resources will have to be discharged for that covered entity; but also against the risks of how much any single discharge could cost. In the case of Health Insurance there is no question that financial resources will have to be discharged. As will shortly be addressed; the US health care system was already rife with doctors charging patients leveraging financial cash one amount; yet charging insurance companies significantly greater financial resource amounts with the expectation that the actual amount would be haggled down to somewhere above a financial cash transaction. Mr. Obama's Affordable Care Act did absolutely nothing to address the risks on either side of the Insurance Company Business Model. 

The point to be made then is this. The Republican Party does not have any legislation in mind to replace the Affordable Care Act. The Affordable Care Act was never affordable and never did anything to actually lower the costs of medicine in the United States. To quote some quick-shots from myself on G+ in October 2013:

The Affordable Care Act doesn't actually do anything to stop Doctor's Offices from charging insurance an inflated figure and then haggling down; while charging cash patients far less money.  
The Affordable Care Act doesn't actually do anything to lessen the amount of insurance paperwork any single Doctor's office has to deal with. Rather, according to the Doctor's I try and stay in contact with, their paperwork and filing needs will increase.
The Affordable Care Act doesn't actually do anything to lower or establish tax exemptions on medicines. 
The Affordable Care Act doesn't actually do anything to stop brand-name drug developers from overpricing their drugs; and then using the trade system as a battering ram to prevent generic drugs sold at affordable prices from making it hands into patients. As a personal example: I suffer from high blood pressure. The best drug combination, to date that works with my body chemistry is a Bystolic / Hyzaar combination. While Hyzaar has a generic available, as this posting Bystolic does not. The practical result for me is that I currently make do with an Atenolol / Lisinopril combination that is nowhere near as effective; but is affordable. The Affordable Care Act does nothing to address the market abuses of the pharmaceutical companies; and that in turn has a direct effect on the downstream costs of health care.  
The Affordable Care Act doesn't actually do anything to get more Doctors into Practice. There is a shortage of both Doctors and Nurses within the United States. The Affordable Care Act does nothing to reduce the amount of financial and legal risk that is associated with practicing medicine; nor does the legislation reduce or simplify the costs or processes in training to become a Doctor or a Nurse. The practical result is that the Affordable Care Act does absolutely nothing to address the practical shortage of people who are qualified and trained to serve in medical professions. As such Doctors, and by extension nurses, continue to be forced to turn the costs of their education back onto their clients, e.g. the patients, which continues to escalate health care costs.
Any New legislation from the Republican Party in regards to health-care will, in all likelihood, actually try to the address the actual cost issues at hand. Just passing a law stating that Doctors must charge cash-resource and insurance-covered patients the same exact financial resources would eliminate a staggering portion of the price-gouging that occurs and crater Health-Care costs almost overnight. That being said since Health-Insurance generally carries a labor overhead on the part of the Doctor a bill that allows Doctors to charge Insurance Companies a specified percentage over cash-resource would be more likely to pass with bipartisan support.

In the same way; legislation that targets the market abuses of pharmaceutical organizations would likewise have a direct effect on health-costs. A common argument here is that a prevalence of generic products would drive the billion-dollar pharmaceutical companies out of business. I'm not convinced. Speaking for myself I'd happily pay out for the brand name Bystolic / Hyzaar if the brand-name versions resource cost was within a percentage'd delta of a generic version rather than a logarithmic'd delta. Case in point: Each day millions of consumers around the world happily pay for brand name medicines like PeptoBismol, Advil, or Bayers Aspirin; despite vendors like Wal-Mart and CVS offering store-branded generic versions for less financial resources.

Understanding that the issues with Health Care in the United States are not, and cannot, be solved with legislation focused around quote/unquote Health Care Exchanges and Insurance Coverage is one of the first steps towards fixing Health Care not just in the US, but in other nations.

As an ending note an alert reader might have noticed that a specific form of addressing a specific person was avoided in the entirety of this posting. To be blunt: When a person in an politically elected office demonstrates complete and absolute utter incompetence in that office; that person forfeits any and all rights to the protections and benefits offered of that office; including but not limited to the expectation to be addressed by the title that office would normally grant.